Singapore - The US Federal Reserve, the Banco Central do Brasil, the Banco de Mexico, the Bank of Korea, and the Monetary Authority of Singapore (MAS) Thursday announced the establishment of temporary reciprocal currency arrangements (swap lines). These facilities, like those already established with other central banks, are designed to help improve liquidity conditions in global financial markets and to mitigate the spread of difficulties in obtaining US dollar funding in fundamentally sound and well-managed economies, said the Singapore central bank in a statement.
The MAS said it is also establishing a swap facility with the US Federal Reserve that will provide US dollar liquidity of up to 30 billion US.
Citing the international character of financial markets in Singapore, MAS said it deemed it prudent to join the group of central banks that have established swap facilities with the US Federal Reserve.
"This is a precautionary measure to reassure financial institutions in Singapore, most of which have global operations, that they have access to US dollar liquidity," the city state's central bank said.
MAS said it has judged that it is not necessary to draw on the swap facility at this time, but will continually assess the need as global conditions develop.
The swap facility with the US Federal Reserve has been authorised through April 30, 2009.
